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Renting out current home and buying another....

Options
Hi - after some advice.....
Desperate to move house and my buyer is proving to be problematic (too long and boring to go into).  We are at the end of the conveyancing process.  The property I am buying has no forward chain.

So, an (expensive but just about doable) option is:  Let out my current home for 9 months or so and buy the property I have agreed to.

I am aware that there are changes to how the rental market operates but cannot find a date when this comes into effect??  Is this my poor Google skills or is there a date when the legislation is live?  

If I do go down this route, what are the implications - assuming CGT, which will be minimal given I know the property's value atm and will be selling within a short period of time - clearly Income Tax on the income from renting but mostly need to understand all the possible implications - are 9 month rental contracts a thing??

Many thanks for any advice you can offer.

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Comments

  • user1977
    user1977 Posts: 17,764 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    Assuming the property is in England, then no, there is no date set for new tenancy laws as the legislation is still to go through parliament - and won't become effective immediately even then, so you're looking at the current rules.

    Bear in mind you'll be paying the additional rate of SDLT for buying your second property, though can claim a refund if you complete a sale of the first one within 3 years.

    As for the period of the tenancy, bear in mind there's no guarantee the tenant will leave on the end date without enforcement action being taken (which may add months).
  • Anthear
    Anthear Posts: 227 Forumite
    Tenth Anniversary 100 Posts Name Dropper Combo Breaker
    Hi - thanks for this.  Yes the Stamp Duty is eye watering - but it is what it is and I knew I could claim it back.  Thanks!
    I can issue against tenants not leaving at the end date??

  • theartfullodger
    theartfullodger Posts: 15,691 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 14 June at 12:13PM
    Which country ?? e.g. Scotland, NI???  The laws vary, considerably. 

    Assuming england, you'll obviously realise that this "9 months or so" will require you to be able to enforce the end of the tenancy. Just because the tenancy has an end date of say 9 months away does not mean tenancy ends.  Thatcher's 1988 Housing Act says it continues, forever, unless tenant or court end it. 


    Currently difficult to enforce end (and easy for a new, perhaps uneducated in landlord/tenant matters landlord, to get the paperwork wrong so they have no rights to enforce ending through courts...).  So suggest you have a plan to cope with not being able to get the place back.

    How were you planning to get educated, please??

    Remember to be a lettings agent in England requires no qualifications, no training, no criminal records check.  The whole office could be ex-cons from Brixton on early release from GBH & Fraud porridge.

    Seriously.

    Artful: Landlord since 2000.
  • Anthear
    Anthear Posts: 227 Forumite
    Tenth Anniversary 100 Posts Name Dropper Combo Breaker
    Yes, England.  I would be using an Agency so not DIY-ing any of the legal stuff but as I understand it, selling a property is a legitimate reason for ending a tenancy under the new legislation??
    You can also insure against legal fees for eviction??

  • elsien
    elsien Posts: 35,964 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 14 June at 12:53PM
    Only a court can end tenancy if a tenant refuses to leave. Timescales vary. 
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
  • user1977
    user1977 Posts: 17,764 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    Anthear said:
    Yes, England.  I would be using an Agency so not DIY-ing any of the legal stuff but as I understand it, selling a property is a legitimate reason for ending a tenancy under the new legislation??
    You can also insure against legal fees for eviction??

    Yes, it's more being aware that there's no guarantee you'll get vacant possession after 9 months.
  • Anthear
    Anthear Posts: 227 Forumite
    Tenth Anniversary 100 Posts Name Dropper Combo Breaker
    Yes, I was aware of that, but thanks for highlighting.
  • RAS
    RAS Posts: 35,543 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    There are numerous regulations with which you need to comply before you even let it and the procedures that need to be complied with when the tenants move in. Get it wrong and the fines can be substantial. At the very least check the cost of compliance before you commit'

    Also be aware that you may have to cover a tenant who fails to pay rent, demands the replacement of the boiler and then leaves late, trashing the place. 

    Using a letting agent does not relieve you of legal responsibility for compliance. This sub-forum is littered with LLs try to clear up the messes created by agents who've fail to comply with the basic law. 

    You might get a bit of money to help towards the mortgage, or end up seriously out of pocket.
    If you've have not made a mistake, you've made nothing
  • sheramber
    sheramber Posts: 22,413 Forumite
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    Have you done the suns of how much rent you could get against expenses- any mortgage repayment, agents fees, cost of various certificates needed  to let the property? 

    Why do you think selling will be easier/ quicker in 9 months? 
  • Hoenir
    Hoenir Posts: 7,736 Forumite
    1,000 Posts First Anniversary Name Dropper
    Anthear said:
      Let out my current home for 9 months or so 

    Then be upfront with any prospective tenants from the off. As that's a short time frame. Buyer isn't going to exchange contracts while tenants are in situ. 
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